3 ms·
That struck me as bogus. In other words, they're saying the businesses aren't profitable enough to service debt loads that were thought to be sustainable debt
by Digory 9y ago
That struck me as bogus.
In other words, they're saying the businesses aren't profitable enough to service debt loads that were thought to be sustainable debt loads a few years ago.
That still points to lower than expected retail profit. Interest rates have been unusually low for more than a decade, so it's not like a credit spike changed the assumptions.
- emodendroket 9y agoIt calls out some of this debt being from 2007, and some cursory checking on my part suggests things were picking up again to a notable degree more recently. http://www.reuters.com/article/us-uslbo/cheap-financing-fuels-u-s-leveraged-buyout-boom-idUSBRE88J1GV20120920 http://www.reuters.com/article/us-uslbo/cheap-financing-fuel... Anyway, at best it contributes to a negative feedback loop.
- pixl97 9y ago>thought to be sustainable debt loads a few years ago. No, the debt was never sustainable. Essentially the banks allowed loans which were gigantic ponzi schemes. Retail: "Our growth will continue forever!" Banks: Hmm, we got bit pretty hard on these home loans and need somewhere else to make money, "Forever growth is like infinite money, I like money!", "Here is 10 billion dollars, just remember to pay us back in 2017".